Does becoming an agent make sense?

Question

My long term goal is to become a commercial investor, buying apartment buildings and businesses. Because of that, I've been contemplating becoming an agent myself since I would also like to get involved in wholesaling and flipping. I would take all the profits and reinvest it back into properties to grow the portfolio. My only concern is, is it worth the time to become an agent? My brother is one and is seems like he makes good money from what he tells me.

My current sales job provides pretty good income as well but I'm on call so it's frustrating at times. I love real estate and all the benefits that it provides, i'm just unsure if getting a license and becoming an agent is something I should pursue.

For those who have more experience, what advice might you have on the matter?

Eric Piccione · Answer

Good points, while I would be on call with a client, I won't mind it nearly as much as I have a much better understanding of what my week looks like.

I'll also be able to vet out the people who won't be a good fit due to qualifiers.

By control, I simply mean having the ability to decide who I can move forward with given income and various other things.

At my current job, I pretty much sit around all day waiting for something to come in and then I will go and attempt to 1 call close the client. The services are necessary but it doesn't sit well with me anymore.

But in the agency world, I don't mind going to multiple homes in one or multiple days to find the one a client loves. I'm providing a service that people want guidance through as opposed to something people have to make a decision in a 3 hour time frame in my current line of work.

Not to mention I want to be in this field for a long time and knowing the market provides a huge advantage without me having to consistently reach out to someone asking for anything new.

Corby Goade · Answer

There's a bit of give and take to this concept. I have my license and I wish I would have done it much earlier. Some people say there's too much liability, which is total BS. If you are an ethical person, there's no added liability in having your license.

That said- working as an agent isn't just pushing paper, there is nuance to negotiation and writing contracts. If you are only doing it to represent yourself on occasion, the chances of you being taken advantage of by more experienced agents on the other side of the transaction are very high. I do lots of deals, and when there is an agent on the other end of the transaction with limited experience, they completely miss many opportunities for leverage or creating opportunities for themselves and their clients.

Finally- in many markets, commercial properties are all backroom, handshake deals. If you are't a licensned agent or broker, the chances of you seeing 90% of the available properties is very low. You'll have to be part of those conversations and a license will open those doors for you.

I'd say if you choose to do it, be humble and actively involved in your market regularly and don't be afraid to network with brokers and have them help you negotiate contracts. If you do that, it could be a huge benefit to your investing career.

Wale Lawal · Answer

@Eric Piccione It's 7-month since you asked this question, I am not sure where you are on this quest. Let's connect. I may be able to help you connect the robe. I was in your shoes few months ago and I am now a Rockstar ON-FIRE Agent and a Buy & Hold Investor with over 12 doors.

Your PASSION for Real Estate MUST be very large to succeed and you need to become an Agent with the right mindset and attitude....You can learn all these if your passion is huge and you have that burning desire to succeed.

Send me a Personal Message and we will go from there.

Goodluck

Lydia S. · Answer

@Eric Piccione

It appears you don’t like the aspect of being ‘on call’ or controlling leads that come your way.  That alone suggests you may not enjoy being an agent as that’s pretty much how Real Estate goes.

A new home hits the market and your buyer wants to see it?  In this market especially, you are out the door to show or you miss your window of opportunity.

You’ll need to market yourself to some degree and then in come leads, which you can refer out of course, but you won’t control the leads coming in.  Unless I misunderstand your point.

If you’re talking commercial real estate only, that’s a completely different ball of wax and I can’t say my points apply.

Good luck with whatever you choose to do.

Brit Hale · Answer

Sell one or two properties a year and that more than pays the dues and fees as well as gaining MLS access. I would say that getting licensed just to work on your own properties is most often a waste. Partner with a skilled agent and let them do the heavy lifting/leg work. Be awesome and whatever you do (whether current job, new unrelated job, or Realtor if that's what you choose) and partner with people who are great at what they do to obtain the best results.

Eric Piccione · Answer

@Matthew Mazur

I don’t work much right now through my job but I make decent money. I’m really considering becoming one since it provides so many opportunities someone without a license may not have

Matthew Mazur · Answer

@Eric Piccione if you’re going to jump into brokerage now, especially investment sales, you should have a good amount of savings. It’s a weird time to start and investment sales is a part of the business that is on fire in an up market then, not so much... think about it, if you owned an investment property and did not have to sell, why would you sell when the market is down, would you even be able to hit the return you promised investors?

95% of agents crap out in the first 5 years. The guys that make it longer are all the way “in” and have a plan that they get up and work every work day. I think this can be a good way to get really ‘seasoned’ in RE, but brokerage is a really huge commitment and not the most direct path to becoming an investor. By the way, I know real people that have done this, so it’s 100% possible, but they are really 1 in 10,000 case studies.

Forrest Faulconer · Answer

@Eric Piccione

Hey Eric, there are ongoing fees and commitments involved in being an agent, so certainly weigh out the cost benefits of it. I am an engineer, but got my license because I want to transition out of engineering one day. So if you don't plan to actually do real estate brokering, it may not be worth your time or money to get your license.

Forrest

Eric Piccione · Answer

@David Lee Hall, III

I’m an independent minded person and I really don’t ask my brother for access to be honest. I currently am having issues with my employment since the schedule is on call and I’m limited to opportunities to make money since I have no control over the leads that come my way.

We have a short term rental which is great but I’m looking to grow the portfolio faster and having a high income position will provide this opportunity. My one call closing job is great on occasion since the income isn’t too shabby but I’d rather work in a field where I’m interested long term and I’m not limited to one skill set while also expanding my tool belt in the process.

David Lee Hall, III · Answer

@Eric Piccione

I think the question you need to ask yourself is if you want a new career or be an investor. You already have access to MLS information via family, and don’t need a license to invest (I would actually argue for wholesaling it can be counterproductive but that is for a different discussion). If you are happy in your job and just want to invest, then I would focus on learning investment real estate. Keep in mind becoming and agent does not train you in this niche.

Does becoming an agent make sense?

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